Improper accounting for operating costs has often resulted in the SEC bringing action against companies for fraudulent financial reporting. Expenditures that are expected only to benefit the year in which they are made should be expensed (deducted from revenue in the determination of net income for the current period). Companies that engage in fraud will often defer these expenditures by capitalizing them (they debit an asset account reported in the balance sheet instead of an expense account reported in the income statement).